RAINBOW CITY, Alabama -- A city whose nativity scene was challenged by the Freedom From Religion Foundation has responded through its city attorney, arguing the light display is allowed under case law.

A lawyer for the Foundation, however, argues that interpretation is "100 percent wrong."

"We're certainly not going to let it drop," said Andrew Seidel, a lawyer with the Freedom From Religion Foundation.

Last week, the Wisconsin-based group, which challenges religious displays such as nativity scenes on government property at Christmas time, sent a letter to Rainbow City arguing its nativity scene presented "an inherently Christian message on government property." The city, after taking it down, replaced it a day later. On Friday, more than 500 people turned out for a demonstration to support the city in displaying the nativity scene.

Seidel said the letter came after a local resident complained. That same resident is now "mulling things over," he said.

"We don't like to sue," Seidel said. "We try to avoid lawsuits. We don't enjoy them. It would be a shame if this had to go any further than us writing a letter."

When the Foundation challenges a city's nativity scene or religious display, the display is sometimes sold as surplus city property, occasionally to a church that then displays it publicly. This happened earlier this month, when the Foundation challenged a nativity scene in Jay, Fla. The city eventually sold the scene, which had been on display for 40 years every Christmas.

Nativity demonstration: Dec. 19, 2014RAINBOW CITY, Alabama -- A crowd of more than 500 turned out Friday, Dec. 19, 2014, to show support for keeping a nativity scene light display in front of City Hall in Rainbow City. (William Thornton / wthornton@al.com)

In Rainbow City's letter of response, Attorney Jim Turnbach said the nativity display does not "infringe upon any constitutional prohibitions or upon federal Case law which we deem not only relevant, but controlling." He also argued most of the cases the city relies upon were ones in which the Foundation participated.

Turnbach said any assertion the nativity scene stood by itself on city property was "factually inaccurate."

"While it appears clear that you have not made a trip from Madison, Wis. to personally assess the situation within the municipality, such a trip would have, in all probability, prevented the instigation of unnecessary alarm," he wrote.

He argued the city has more than 60 holiday displays around the city, and several displays around City Hall that are visible from the road, in addition to the nativity scene.

Turnbach went on to say he would "welcome the opportunity" of addressing any concerns, "with a view toward either agreeing on the legal position of the City of Rainbow City in light of the totality of the factual situation, or alternatively engaging you in a discourse of the necessary components of citywide visual displays which will result in continued expressions of the sentiments, wishes, and heartfelt feelings of the Holiday Season."

Seidel, however, said he saw no actual cases cited in Turnbach's letter, and said the question in any legal challenge would center on how people passing City Hall would view the display.

However, Seidel said the Foundation may wait to address the issue "when cooler heads can prevail," citing last week's demonstration. "Now that politicians are involved, we may wait for this to die down," he said. "This is an easy time for politicians to score some cheap political points."

State Sen. Phil Williams (R-Rainbow City), and State Rep. Mack Butler (R-Rainbow City) both spoke at last week's demonstration.